Precarious state of government contractor raises fresh questions about private delivery of public services.

The government contractor Capita’s decision to launch a drastic rescue plan has led to fears it could follow Carillion into liquidation, leading to fresh doubts about the integrity of government outsourcing.

In light of last week’s collapse of Carillion under a mountain of debt and with an estimated pension deficit of up to £990m, Capita’s shares fell by almost a half yesterday after its chief executive “slashed profit forecasts, announced plans to tap the market for £700m of investment and suspended a dividend that was worth more than £200m to shareholders last year”, says The Guardian.

The Tories have always been keen on dishing out all of their public contracts to their private sector friends but it now seems that these ideas are eventually coming back to bite them.

The frantic desire of the Tories to create a minimalistic public sector and to let the private sector do all of the work needed done for the taxpayers is having the effect of costing the taxpayers much more than it would have if these contracts had been kept in-house.